Tue, Jan 09, 2007 - Page 12 News List

UBS Global eyes slice of nation's sizzling real estate

By Amber Chung  /  STAFF REPORTER

The nation's sizzling property stocks may see extra funding momentum as UBS Global Asset Management said it was mulling investing in local developers to get a slice of the real estate boom in Taiwan.

"We could invest [part of our Asian real estate securities funds] in Taiwan's property stocks on the open market in the future," Bruce Ebnother, senior portfolio manager with UBS Global Asset Management (Americas) Inc, told the Taipei Times on the sidelines of a press conference yesterday.

UBS would target Taiwan's residential segment and developers who control ownership of properties to be developed, he said.

Despite the rally last year, there is still upside potential for property stocks in the future, driven by factors such as expected rental rise and any positive development in cross-strait relations, Ebnother added.

The property sub-index rose 0.67 percent yesterday, compared with a 1.26 percent decline in the benchmark index amid weakening markets in the region and a domestic outbreak of troubled enterprises and banks that has dented investment confidence.

Eyeing the Asian property boom, UBS Global Asset Management yesterday launched a mutual fund, aiming to raise up to NT$10 billion (US$306.04 million) in Taiwan.

UBS plans to invest approximately 80 percent of the fund -- which claims an annual return of 3 percent to 4 percent -- in real estate investment trusts (REITs), real estate and property-related stocks in Asia, primarily in Japan, Hong Kong and Singapore -- the top three REIT markets in the region -- with the balance in Australia and New Zealand.

The REIT market in Asia has grown approximately 25 times since 2001 and represents 12 percent of the total listed real estate in the region, said Andreas Mondovits, head of Asia -- excluding China and Japan -- at UBS Global Asset Management.

However, the Swiss investor had no plans to inject funds into Taiwan's REIT market, which given its relative small scale leading to concerns over liquidity, is not yet included in its benchmark indices, Ebnother said.

Taiwan has seven REIT products listed and traded in the bourse, with a combined value of approximately NT$57.5 billion.

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